bear

"Uncle, why are you selling your MTN shares now, they might still go up now." "No o, my brother, I have turned bear on this one. I think it is going down before it goes up again."

That word, bear, is what investors call someone who expects prices to drop. A bear looks at the market, or a particular stock, and sees storm clouds rather than sunshine. They might sell what they hold, hold off buying, or even bet directly that prices will fall. The opposite kind of person, who expects things to rise, is called a bull. Between these two animals, the whole mood of the stock market gets described.

A bear market is simply a season where prices have fallen sharply and stayed down, usually defined as a drop of twenty percent or more from a recent high, and where fear rather than excitement is driving decisions. On the Nigerian Exchange, this happened around 2020 when the pandemic hit and share prices across banking and industrial stocks tumbled as investors panicked and pulled money out. In London, the FTSE has had its own bear stretches too, like during the 2008 financial crisis, when even solid companies watched their share prices halve within months.

For the ordinary Nigerian investor, understanding bear moods matters more than most people admit. If you are contributing to a mutual fund through your bank, or you have shares bought during university that you have forgotten about, a bear market can shrink the value on paper even though nothing about the company has changed. The trick many wise investors use is patience, since bear periods do not last forever, and selling in panic often locks in a loss that a calmer head would have avoided.

For someone in London sending money home to help family invest in shares back in Lagos, knowing whether the market is bullish or bearish helps decide timing, though nobody can predict it perfectly, not even the experts with all their models.